A demo account becomes an all important tool for potential traders during their learning period. It is a virtual account provided to them so that they can practice well before venturing into real trading. The demo account, however, represents real market conditions, so that traders secure a hang of the real marketing conditions. You can make virtual trades with play money here. Most of these demo accounts are free. It’s only when you turn to a live account, you are charged. A good forex broker will allow you unlimited time to trade with a demo account. However, most of these traders offer a 30 day period up to which you can trade with a demo account.
A forex demo account is offered by all brokers to their potential customers, in the hope that they will ultimately be convinced by the support system of the trading platform and agree to open a live account with them. But whatever the intentions of the brokers are, the clients are able to fast track their learning process and equip themselves with the technical know-how, required for achieving success in the forex market (with the help of the virtual account). The benefits of using a demo account are listed below:
It Helps You to Learn How to Utilize the Trading System with Ease
There are several forex brokers (for example, cornertrader and www.bdswiss.com) in the market. You can actually test their trading platform by using these demo accounts – whether the trading style suits you or not, whether at all you’re comfortable with the idea of you putting your money at stake or not, etc. There are several instances when the idea of online trading and making “huge” money catches your fancy, but when you actually start trading, you give up, finding that it’s not easy for you to master the skills of trading. Additionally, if you are interested in trading then you can explore the pros and cons of the forex trading system without having to shell out a penny for the same. You can identify the peculiarities of the foreign exchange markets and adopt strategies accordingly.
It Helps You Identify Whether the Broker and His Trading System are Compatible or Not
At times a broker might seem superb but the trading platform offered by him, might not be equally great. So, it’s better to test it beforehand rather than suffer later (i.e. after investing a considerable part of your hard earned money).
It Aids You Explore the Market Satisfactorily
If you are really able to zero in on a platform offering a demo account for an unlimited period of time, you might as well utilize that time to explore the market better, to think about your decision over and over again.
There are traders, who commit the grievous mistake of not utilizing their demo account properly. It generally happens when you start achieving success with a few initial trades. Being too eager to replicate that success in real trading, you stop practicing with your demo account and start trading with your real account, only with half-baked knowledge about the market. This is definitely not going to help in the long run. Instead, it’s always advisable that you dedicate at least a full month into practice (given a choice – more than that) in order to familiarize with the whole process.